(Reuters) – The main European stock markets are expected to fall at the opening on Thursday, in view of the meeting of the European Central Bank (ECB) and before the publication of key indicators in the United States.
According to the first available indications, the Parisian CAC 40 would lose 0.26% at the opening. Futures contracts on the FTSE in London suggest a drop at the opening of 0.27%, compared to 0.22% for the Dax in Frankfurt, and 0.10% for the EuroStoxx 50.
The ECB will publish its next monetary policy decision at 1:15 p.m. GMT, before commenting on it during a press conference at 1:45 p.m. GMT.
If markets expect another pause in rate hikes, the press conference could provide more guidance on the central bank’s outlook as the situation on the inflation front becomes more complicated and restrictive statements by members of the institution’s board of governors have pushed investors to revise downwards their expectations of rate cuts for 2024.
The President of the ECB, Christine Lagarde, could nevertheless speak out against these expectations which foresee 130 basis points of easing, and a first reduction in June.
The publication of GDP for the fourth quarter in the United States, at 1:30 p.m. GMT, will liven up trade across the Atlantic.
American markets will nevertheless remain focused on the publication of the PCE inflation indicator on Friday, a few days before the Federal Reserve’s next decision.
VALUES TO FOLLOW:
A WALL STREET
The New York Stock Exchange ended in mixed order on Wednesday, the S&P-500 again beating its closing record, while the solid results of Netflix fueled investor optimism. The Dow Jones index lost 0.26% to 37,806.39 points. The broader S&P-500 gained 0.08% to 4,868.55 points. The Nasdaq Composite advanced 0.36% to 15,481.92 points.
After reporting a significant increase in subscribers in the fourth quarter on Tuesday post-closing, significantly exceeding Wall Street expectations, Netflix jumped nearly 10.7% to reach a two-year peak.
IN ASIA
The Tokyo Stock Exchange ended slightly higher on Thursday, as investors consider the Bank of Japan’s imminent abandonment of its ultra-accommodating monetary policy. The Nikkei index gained 0.03% to 36,236.47 points and the broader Topix gained 0.11% to 2,532.05 points.
Nidec fell 3.2%, among the worst performers on the Nikkei, after the electric motor maker cut its full-year operating profit forecast by almost 20%.
Chinese stocks rose for the third consecutive session after the central bank announced new supportive policies, including a significant reduction in bank reserves, to support a fragile economy and markets. The Shanghai SSE Composite takes 2.66%, the CSI 300 1.69%, the Hong Kong Hang Seng index 1.77%.
RATE
US yields are falling slightly in a wait-and-see environment.
The ten-year Treasury yield fell 1.7 bps to 4.1607%, while the two-year rate was stable at 4.3737%.
CHANGES
Foreign exchange markets remain calm ahead of the ECB’s decision.
The dollar gained 0.09% against a basket of reference currencies, while the euro lost 0.06% to 1.0877 dollars, and the pound sterling 0.09% to 1.2712 dollars.
In Asia, the yen fell by 0.23% to 147.84 yen per dollar, while the Australian dollar stood still at $0.6576.
OIL
Oil rises after the decision of the Chinese central bank and after crude inventories in the United States fell by 9.2 million barrels last week, according to figures from the Energy Information Administration, much more than consensus .
Brent advanced 0.49% to $80.43 per barrel, with American light crude (West Texas Intermediate, WTI) gaining 0.57% to $75.52.
MAIN ECONOMIC INDICATORS ON THE AGENDA FOR JANUARY 25:
COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS
FR 07:45 Business climate January 100 100
FROM 9:00 a.m. Ifo climate index for January 86.7 86.4
business
US 1:30 p.m. Preliminary Q4 GDP 2% 4.9%
US 1:30 p.m. Unemployment registrations per week at 200,000 187,000
January 15
(Written by Corentin Chappron, edited by Zhifan Liu)
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